Ex-Trade Envoy Is Bush’s Choice for World Bank

Wednesday

May 30, 2007 at 5:43 AM

Robert B. Zoellick, a former senior diplomat and trade envoy, has been tapped to try to heal the rifts left by Paul D. Wolfowitz’s ouster.

STEVEN R. WEISMAN

WASHINGTON, May 29 — President Bush has chosen Robert B. Zoellick, a senior diplomat and trade envoy who became a top Goldman Sachs executive last year, to lead the World Bank and try to heal the bitter rifts left by the ouster of Paul D. Wolfowitz, the administration said Tuesday.

Treasury Secretary Henry M. Paulson Jr. said Mr. Zoellick had emerged as the first choice of economic ministers around the world, who have been calling for someone to overcome the bank’s credibility problems among donor and recipient countries alike.

“Bob has a very strong track record working with colleagues and leaders to get results,” Mr. Paulson said in an interview after word of the appointment spread. “He’s got great energy and enthusiasm and will be able to hit the ground running. I also think he’s got strong management capabilities.”

Mr. Zoellick, 53, has served in high-ranking foreign policy and economic policy posts under three Republican presidents, beginning with Ronald Reagan. His selection is to be announced by Mr. Bush on Wednesday.

Mr. Zoellick plans to visit the bank and meet its staff almost immediately, administration officials said, and the bank’s 24-member board of directors is to vote on the nomination soon afterward.

He faces an institution riven not only by the travails of Mr. Wolfowitz, who resigned this month amid charges of favoritism, but also by major disagreements among donor nations over the bank’s mission.

Many conservative supporters of the Bush administration, resentful over Mr. Wolfowitz’s resignation, are insisting the United States keep up the pressure on the bank to carry out Mr. Wolfowitz’s plans, including combating corruption and demanding concrete results in aid programs.

The bank lends about $23 billion a year to poor countries and is the principal vehicle for grants and loans to the poorest among them. But the bank is also facing challenges in raising $30 billion over the next three years to renew its lending for the poorest countries. Many rich countries had balked at new lending while Mr. Wolfowitz remained in charge.

Bank officials say Mr. Zoellick’s first job will be to raise money for the poorest countries and reshape its lending for “middle income” poor countries like India and China, which now have access to capital.

There are also lingering issues, including whether to retain several top officials Mr. Wolfowitz elevated.

Mr. Zoellick served six years in the current Bush administration, as United States trade representative from 2001 to 2005 and then as deputy secretary of state until last July. Under President Reagan and the first President Bush, he held top posts at the Treasury and State Departments. He is known as tough, strong-willed, demanding and occasionally abrasive, but has built a network of admirers and allies around the world during his years in the government.

Mr. Zoellick is continuing the tradition of Goldman Sachs executives’ returning to public service under the Bush administration. Before becoming Treasury secretary last year, Mr. Paulson was the chief executive of Goldman Sachs; another former Goldman official, Joshua B. Bolten, is White House chief of staff.

“It’s a very tight network, this Goldman one,” a European official said. “If you’re going to limit your search to an inner circle of people trusted by the Bush administration who are also acceptable to the Europeans, Zoellick is going to score very well.”

In the last year, as vice chairman for international affairs at Goldman Sachs, Mr. Zoellick worked on developing capital markets in Asia, especially China.

As deputy secretary of state, he concentrated on improving relations with China and on trying, though without much success, to negotiate a pact with Sudan to end the rebellion and killings in Darfur.

He won the attention of international economic officials for his work in starting the current global trade talks shortly after the Sept. 11 attacks. The goal was to lift trade barriers in rich countries to help poor countries reliant on exports.

Trade officials say Mr. Zoellick’s offer to lower American tariffs and subsidies on farm products impressed exporting countries and put them in his corner. He worked closely with Pascal Lamy, head of the World Trade Organization, to get the talks started. “I have known Bob Zoellick for over two decades,” Mr. Lamy said. “I have always appreciated his skills as a consensus builder and his capacity to reach out to developing countries.”

The German finance minister, Peer Steinbrück, also endorsed Mr. Zoellick’s candidacy, administration and German officials said. Mr. Zoellick was a top aide to Secretary of State James A. Baker III in helping negotiate terms of reunification after the fall of the Berlin Wall.

Administration officials acknowledged that Mr. Zoellick could be a difficult boss but said he backed subordinates and won loyalty. A 2003 review of the cabinet in the National Journal rated him as “one of the most successful members” but one who could “wear his people down.”

One issue Mr. Zoellick will have to address is the future status of Shaha Ali Riza, Mr. Wolfowitz’s companion, whose transfer, pay raise and promotion sparked the rebellion in the bank that led to his downfall.

The fact that Mr. Zoellick was the leading candidate was first reported in the Financial Times on Tuesday.

The selection of Mr. Zoellick caught the bank board by surprise. The board, which under bank bylaws elects the president, met in the day and in the evening issued criteria for the new president; it said nominations would be accepted before June 15, with a choice made by June 30.

Administration officials expressed confidence that the board members would be guided by finance and development ministries from their home countries and would quickly ratify Mr. Bush’s choice. Nevertheless, bank officials expected some lingering unease over the way the United States treated the board a kind of an afterthought.

Some at the bank said that some board members representing India, China or other developing countries might not vote for Mr. Zoellick or would even put forward candidates.

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